A. This answer is incorrect. See correct answer for an explanation.

B. An annual payment on a loan is an annuity. The principal balance of the loan is the present value of the annuity. The present value of an annuity is the annual amount paid or received at the end of each year multiplied by a present value of annuity factor. Here, we have the present value of the annuity ($30,000) and we have the annuity amount ($7,900). So we need to find the factor. After we find the factor, we can look up the factor in a PV of an annuity table, and that will tell us what the interest rate is that this annuity is being discounted at. To find the factor, we divide $30,000 by $7,900, and the answer is 3.7975. We then go to the PV of an Annuity table and look across from 5 years to find the factor that is closest to 3.7975. The factor for 10% is 3.791, which is very close to 3.7975. Therefore, the interest rate on this loan is approximately 10%.

C. This answer is incorrect. See correct answer for an explanation.

D. This answer is incorrect. See correct answer for an explanation.